Many individuals today carry more than one credit card, in addition to a debit/check card and numerous perk/loyalty program cards. Combined with numerous receipts, a driver's license, and a few photos, the wallet of today can be quite a burdensome load. The bottom line is that today's wallet is not practical for the cashless, wireless, and paperless world of tomorrow. In addition, credit cards are not completely secure. Financial losses associated with credit card identity theft cost merchants, consumers, and financial institutions were in the billions of dollars in 2003. The problem is two fold; credit cards are not secure if they are lost and/or if someone else gets the account numbers. Credit card and identity theft is a prevalent threat to a person's security in today's society.
Excluding cash transactions, commerce today involves selecting a financial institution with which you are a member and using their designated card, check, and other instruments of payment to make a purchase. The user is in essence authorizing the transfer of funds from one account to another in exchange for goods or services. These instruments of payment simply allow the authorization of a transfer of funds and in no way provide the user with information as to the status of their account beyond an approval or denial by a point of sale (POS) terminal.
Credit and debit cards, plastic cards with magnetic strips, have in large part replaced writing checks for purchases. An inherent problem with these cards are that they are only capable of storing one financial institution's accounts and thus people are required to carry a card for each of the financial institutions in which they hold accounts. Also, these cards contain user identification and account information in visible format and in electronic format that is susceptible to fraudulent use. The visible format is the common raised and printed user name and account number.
Internet transactions are becoming increasingly accepted as the viable and most secure form of payment available. Internet transactions can be accomplished in real-time and use a more secure form of validation and authentication as compared to a traditional POS payment. While a POS payment requires a signature and/or a PIN number, an internet transaction can verify account name and address along with a security code found on the back of the physical card.
Online financial databases are currently in place for electronic commerce (e-commerce) transactions. These databases have proved to be an effective method of payment for person to person transactions such as those occurring on auction sites as compared with checks and money orders. A database of accounts allows the user the freedom to select which institution they would like to pay debts with. These databases have proven to be a secure and efficient way to promote commerce over the internet.
What is needed in the art is an instrument of payment that as convenient as a credit card but is free of visible identification that can be used fraudulently by another. Further, what is needed is a payment authentication method that provides the account holder access to account information and the ability for the account holder to selectively authenticate specific financial transactions.